9 Things to Consider Before Starting a Retrofit Project

23 April 2018

The
distribution centre (DC) you designed several years ago may not be the one you
need today. eCommerce, omnichannel,
speed, changing order profiles and new customer requirements - your business
has changed. Over time, even small changes in your operations can erode
efficiency. It may be time for a retrofit to take advantage of newer technologies,
process changes and systems advancements that will optimize your operation for
the needs of the business today and prepare your company for future growth. But
how do you do that without crippling your current operations?

Doing
a DC retrofit is a little like having heart surgery while running a marathon.
The operation has to keep running while you make changes. Tear-outs and cut-ins
take time. But there is often limited time in the day for work that requires
processing of orders to be put on hold. You often have a lot of activity
happening in a short period of time (overnight/off-shift) which requires strong
team organization and project management. And once you start the work, you
often don’t have a “go back” solution. When you turn the equipment on, it has
to work or operations suffer until you get it running. The time limitations
also apply to testing, which is a critical aspect of any retrofit. How do you
test in an operating facility without giving up some productivity?

Here
are 9 things to consider before beginning a retrofit project:

1.
Map your processes to determine whether upstream and downstream equipment
and processes are sized to handle the impact of the new equipment. In an
automated environment, when you change any piece of equipment, there are
conveyors leading to and from the equipment that will be impacted. The speed of
the conveyor has to be matched to the equipment in place. Existing processes
may require additional work stations or additional labour. Can these be
accommodated in the new design? All of these can be limiting factors when
considering new equipment.

2.
Consider the maintenance and rehab costs of re-using older equipment.
There has been a lot of merger and acquisition activity among material handling
equipment suppliers over the last few years. Is the equipment still supported
by the original manufacturer or the company that acquired them? What is the
cost of that support? Can you still get spare parts when you need them?
Equipment warranties can also be voided by changes made during a retrofit. Make
sure you fully understand the warranty and support of any equipment impacted by
the retrofit.

3.
Dedicate time and resources to change management as part of the solution to
mitigate resistance to the new processes. Process changes can be more
difficult than equipment changes. New processes standards must be taught and
measured. Educating and training associates on the new processes is necessary
no matter what, but change management helps to lower resistance and ensure a
smooth transition. Retrofits often require new operating methods used and
procedures. The adoption of new methods requires getting staff involved early
in the process and asking for their buy-in. Prototyping is a great way for the
associates to “try-out” the new design in order to gain their buy-in. You need
associates to take ownership for the change from the lowest levels of the
organization all the way up through leadership. It’s best to roll-out changes
slowly through a series of meetings and trainings to ensure that everyone is on
board and ready for the change.

4.
Prepare for software systems changes and the need for upgrades,
especially in the controls software. The systems piece can become the biggest
area of cost and complexity. In facilities with a well-defined systems
architecture and understanding of the functionality that falls to each system
(ERP, WMS and controls software), it’s easier to add equipment and make updates
to systems. This is often the case with newer buildings. But over time and for
any number of reasons, operations change and move away from the planned
architecture. You end up with multiple systems in a single warehouse with
overlapping capabilities and no clear architecture. There’s always some level
of risk around equipment controls and the handoff from one system to the next.
Ask yourself: Is the I/O scheme (wiring of the equipment) to be connected
together similar? Can they talk to each other?

5.
Plan for extensive testing at production volumes because that’s where
you find the issues. The testing plan is critical to success. You want to set
your testing time for a time when the operation is not running production, but
be sure to use production-like volume to properly stress test the system.
Simulation software can help with testing capabilities before you start moving
equipment. A simulation will help you understand the overall flow and look at
downstream impacts before you do a full volume production test. WMS testing is another
critical area. Suppliers often do functional, technical and stress tests on
their individual pieces of the solution, but a fully integrated operational
readiness test (ORT) is necessary to ensure various components of the solution
work together and that you are ready for full production.

6.
Augment your existing resources. Project management is often a full-time
job on complex retrofits; but even on smaller retrofit projects, it can require
significant time and energy. But companies rarely dedicate full-time resources
to this critical role, and instead they add the responsibility for the project
to a leader who already has a full-time job to do daily. Where possible,
consider off-loading some daily responsibilities from your project manager to
other resources for the duration of the project, so that they are able to give
their full focus where it is most needed. When going from manual or low-level
automation to more complex automated environments, be sure that a maintenance
team is in place to support it. New software may also require additional
technical resources or skill enhancements to support.

7.
Budget for contingency where there are known areas of risk. What will
you do if it doesn’t work the first time you turn the solution on? The timing
and sequencing of changes to the building, equipment, people, processes and
systems must be clearly understood and agreed upon by all parties. You may want
to seek outside help to gain a better understanding of some of the risk areas
(controls, certain equipment types, etc.) and the long-term implications of the
decisions you’ll be required to make. Alignment of all stakeholders both within
your organization and those with whom you contract for work on the project is
one of the most challenging aspects of any retrofit project.

8.
Thoroughly document site conditions before you begin the design work with
both structural design plans from the architect (where available) and extensive
field measurements. Make sure that the slab and any existing mezzanines or
platforms can compressor pneumatics are sufficient to sustain the additional
load requirements, and ceiling joists can support the additional weight of
hanging conveyor and other equipment attached to them. Take the time to measure
accurately in multiple locations. Don’t measure the distance between two
columns of a platform and assume that the rest are placed uniformly throughout.
If they’re not, your design can be way off or require significant re-work.

9.
Consider choosing a partner who will take responsibility for the entire solution,
rather than just their piece of it. If you have multiple equipment
suppliers, it can be hard to find one who will step up and take responsibility
for the solution when the problem lies outside their own equipment.

Summary

Retrofits
are more complex than ever because technology is advancing rapidly. Solutions
are more complex. And the stakes are high when making changes in a facility
that’s operating at or near capacity already. But a retrofit doesn’t have to
set you back if you carefully plan and manage it well. Doing so can buy you
several years in your existing facility and save you significant capital
investment while addressing the changing business requirements of the
operation.

Disclaimer: The information and opinions expressed in this website and the Supply Chain Update newsletter in no way constitutes professional advice and does not necessarily reflect the views and opinions of the editor and staff of Supply Chain Update or Vicenda.